The Sydney Morning Herald reported on Monday that Rio Tinto had hired Deutsche Bank to advise it on a possible bid for Alcan, which emerged as a hot takeover target this month after rejecting a $28.5 billion offer from Alcoa.

"We always consider opportunities but whether or not we are moving ahead, doing anything like due diligence, is pure speculation," Oscar Groeneveld, chief executive of Rio TintoAluminium, told Reuters in an interview.

"I can't comment on that speculation because it is only speculation," he said on the sidelines of an economic conference in the Malaysian capital.

Norway's Norsk Hydro is reported by the Canadian press to be weighing up a bid for Alcan as well.

BHP Billiton , Companhia Vale do Rio Doce, United Company RUSAL, Anglo American and Xstrata are also seen as potential suitors.

Alcan is the third-largest maker of primary aluminum, behind Alcoa and RUSAL. An Alcan-Rio combination would top RUSAL.

Demand for aluminum has been surging, driven largely by China and other developing economies. Though prices are off their historic highs of 2006, new aluminium smelters are sprouting around the world and existing smelters are being expanded.

Rio Tinto is a serious contender for a smelter project in the east Malaysian state of Sarawak, Groeneveld said.

The project has been mooted for many years, but has never left the Malaysian government's drawing board because of delays to a huge hydro-electricity scheme which would power it.

The 2,400 megawatt Bakun hydro-electric dam is now three-quarters complete and due to be finished in 2010.

"The dam is being built, it's well advanced, so obviously somebody needs to make a commitment," Groeneveld said.

"I think we are very seriously a contender for that. We are looking very seriously at an opportunity in Sarawak and we are having very fruitful discussions, but nothing yet to announce on that front."